Which plan provides the larger amount


Response to the following problem:

Gordon Riley is considering two plans for building an education fund for his children.

Plan A-Invest $2,000 each year to earn 10% annually for six years.

Plan B-Invest $10,000 now, to earn 8% annually for six years.

Which plan provides the larger amount at the end of six years? At the outset, which plan would you expect to provide the larger future amount?

 

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Financial Accounting: Which plan provides the larger amount
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